Recent Posts

Via @WNYPlanner, we learn that New York Governor Andrew Cuomo
has proposed "Tax-Free New York," a plan that
would let any business opening on State University of New York
(SUNY) campuses outside New York City, some private colleges
upstate, some areas adjacent to SUNY campuses, and an additional
20 "strategically located state properties" be entirely tax-free.
According to the proposal:
Tax-Free NY will entice companies to bring their ventures to
Upstate New York by offering new businesses the opportunity to
operate completely tax-free – including no income tax for
employees, no sales, property or business tax – while also
partnering with the world-class higher education institutions in
the SUNY system. In effect, we are looking at a new
incarnation of the enterprise zone, though thankfully without
regulatory incentives to go with the fiscal incentives.
Unfortunately, enterprise zones don't work very well, so the lack of regulatory
exemptions is cold comfort.

Another strike against this program is that it explicitly allows
companies to use it if they relocate from other states. Of
course, relocation from within the state is prohibited:Protecting Against Fraud: Tax-Free NY will
include a series of provisions to protect against fraud.
Businesses will have to submit certification to ESD [Empire State
Development], and falsifying certifications will be a crime. The
initiative will include strict provisions to guard against
"shirtchanging," or when a company reincorporates under a new
name and claims its existing employees are now new jobs. The
initiative will also include measures to prevent self-dealing and
conflicts of interest. In cases of fraud, the state will be
empowered to claw-back benefits granted to the business.
Proving once again, as Good Jobs First reported in
"The Job Creation Shell Game," that states
already know how to write anti-piracy language. They just don't
apply it to themselves.

Finally, as Citizens for Tax Justice points out, this program would exacerbate the
state's fiscal problems: "With the state budget office projecting (PDF) shortfalls ranging up to $3
billion per year in the coming years, removing entire companies
from the tax rolls is hardly fiscally responsible."

Hopefully the state legislature will reject this poorly
thought-out proposal.